Shares in U.S. asset manager BlackRock (BLK) dropped today on reports that Hong Kong-based conglomerate CK Hutchison may not sign off on its proposed $22.8 billion Panama Ports deal next week as planned. Investors were also concerned by news that the Chinese government is considering launching an anti-trust probe into the deal.
Not a Real Deadline
A definitive agreement on the deal was expected to be signed by April 2. But according to a report in the South China Morning Post, Hong Kong tycoon Li Ka-shing’s CK Hutchison Holdings will not go ahead with the expected signing of the deal on that date.
“There will not be an official signing of the two Panama ports deal next week,” a source close to CK told the Post. The source said that April 2 was not a “real deadline” but only a date by which the agreement could be signed at the earliest. It is understood that this does not mean the deal has been called off.
In addition, China’s State Administration for Market Regulation said it would “review the deal” but did not give any indication of when that might start.
The developments add to increased nervousness around the fate of the deal which was announced earlier this month.
Debate Over Deal
The in-principle agreement between the two groups saw 43 ports owned by CK Hutchison, including two at either end of the Panama Canal, being sold to a consortium including BlackRock. The asset manager would buy a 90% interest in the Panama Ports Company alongside Global Infrastructure Partners and container terminal group Terminal Investment. Panama Ports owns and operates the ports of Balboa and Cristobal within Panama.
The move was heavily supported by President Donald Trump, who believes that there is too much Chinese influence in the operations of the Panama Canal. However, the Chinese government is somewhat less keen, urging CK Hutchison to think twice about the deal and even declaring that it sells out the Chinese people.
It was noted only last week that CK had made no mention of the deal in its annual earnings results and did not hold an analyst briefing. It will likely be CK’s annual general meeting on May 22 that will potentially yield some more answers on the Panama deal’s ultimate direction.
Is BLK a Good Stock to Buy Now?
On TipRanks, BLK has a Strong Buy consensus based on 13 Buy and 2 Hold ratings. Its highest price target is $1,275. BLK stock’s consensus price target is $1,179.54 implying an 21.86% upside.
